This study examined the association between the effects of firms’ financial performance on executive
compensation in Nigeria. The existing literature presents different findings on the impact of
executive compensation on firm performance and verse visa. The study hinged on these two
important theories, the agency theory and stakeholder theory. In accomplishing the research
objectives of this study, the audited annual financial statement of ten listed firms in the Nigerian
stock exchange market were selected using the purposive sampling method and the study covers the
range period from 2012-2015. Nevertheless, in analyzing the research hypotheses, the study adopted
the use of both descriptive statistics and econometric technique using the panel least square
regression method in the estimation of the regression equation. The findings from this study reveal
that there is a significant positive relationship between firms’ financial performance and executive
compensation (director’s emoluments) for the sampled firms.
